Not only are we in the midst of the Spring and Summer wedding season, but we are also in prenuptial season. Prospective brides and grooms are accessing their financial futures, taking stock of their pre-marital assets and the debts and taking stock of their individual and joint economic futures. They are also looking for protection in case their impending marriage fails and ends in divorce.
The best, if not the only way to protect and to “divorce- proof” your pre-marital and, to some extent, post-marital property is by entering into a prenuptial agreement. A good pre-marital agreement defines what remains a parties’ separate property and what constitutes marital property. The agreement then details what happens to the property in the when the marriage ends in death or divorce.
Done right, the prenuptial agreement offers good protection; done wrong, the prenup is worthless. In fact, there are some sure-fire ways to ensure that your prenuptial agreement will be invalid:
Don’t memorialize the Pre-Nup in writing
Not only must prenuptial agreements be in writing, they need to be formally executed. New York law requires pre- nuptial agreements to be signed and acknowledged before a notary. Improperly signed and executed agreements will be invalid.
Don’t disclose your assets, income, and liabilities.
A valid prenuptial agreement requires you to lay all your cards on the table. Prenuptial agreements typically provide for waivers rights to maintenance and equitably distributing certain assets. For a party to knowingly make an informed waiver, they have to know what they are giving up.
Don’t have independent counsel
It would be unethical for one attorney to advise both parties to a prenup; as it would be a conflict of interest akin to one attorney representing both a buyer and a seller in the same transaction.
Moreover, if you spent the time and money to prepare a prenup, certainly, you would want it to be found to be a valid agreement. Ensuring that your fiancé had legal representation, drastically increases that chances that even an onerous agreement will survive a challenge.
The typical defenses to a prenup are:
- that the agreement was not properly executed;
- that the agreement was unconscionable;
- that the agreement was procured by fraud, undue influence, or coercion;
- or that the person challenging it simply did not understand or know what they were signing.
Simply having your fiancé represented takes the sting out of theses defenses. Often I counsel my clients that if they are willing to incur the cost to have me draft an agreement, they should offer to pay for their fiance's attorney.
Propose the prenuptial agreement at the very last minute.
While there is no requirement in New York that a prenuptial be signed at a defined time in advance of the wedding, don’t spring it on your fiancé at the last moment. Allow sufficient time to ensure that your future spouse can secure independent counsel, review and understand the agreement and the financial disclosure. All of that takes time.
A prenuptial agreement done right is like an insurance policy that protects you and your assets. When the marriage ends in either death or divorce, you will have some certainty as what will occur. An agreement improperly executed or entered into without the necessary disclosure, legal representation or negotiation if challenged and thrown out is worthless.
If you want a prenuptial agreement done right, please contact us.